Does Restricting Outsiders Always Lower Price and Benefit Insiders?

Document type :

Article dans une revue scientifique

DOI :

10.1007/s11146-020-09797-y

Title :

Does Restricting Outsiders Always Lower Price and Benefit Insiders?

Author(s) :

Lai, Tat-Kei [Auteur]
Lille économie management - UMR 9221 [LEM]
Ng, Travis [Auteur]
The Chinese University of Hong Kong [Hong Kong]

Journal title :

Journal of Real Estate Finance and Economics

Pages :

153-178

Publisher :

Springer Verlag

Publication date :

2022-01

ISSN :

0895-5638

English keyword(s) :

Product quality
Customer restrictions
Vertical restraints
Foreign restrictions
Discrimination

HAL domain(s) :

Sciences de l'Homme et Société/Economies et finances

English abstract : [en]

Policies that restrict outsiders are common. Some justifications include protecting insiders from high price and leaving more of the concerned products to insiders. Sometimes these policies fail to work because outsiders ...
Show more >Policies that restrict outsiders are common. Some justifications include protecting insiders from high price and leaving more of the concerned products to insiders. Sometimes these policies fail to work because outsiders can get around the restrictions. In a model in which a policy of restricting outsiders is anticipated, we find that if the policy works, it only sometimes lowers the price. When the price does decrease, the product quality decreases too. Not every insider would benefit equally; those insiders who likely suffer are identified. While restricting outsiders may or may not reduce insiders’ consumer surplus, outsiders and the producer are always worse off. They therefore would find ways to get around the restrictions. Evaluating these policies must (a) take into account the possibility that they might not work at all, (b) check their effects beyond just price if they do work.Show less >

Language :

Anglais

Peer reviewed article :

Oui

Audience :

Internationale

Popular science :

Non

Collections :

Lille Économie Management (LEM) - UMR 9221

Source :

Harvested from HAL